Which House would you pick?

[vartz04]

House 1
3 bedroom (1 in basement) 2 full bath duplex. First 2 floors are 1054 SF + a finished basement. Location knocks 10 minutes off of my drive to work. 1 car garage (11x19). Tiny Kitchen, No dishwasher, All appliances stay. Decent sized yard for a duplex. Price is $132,000, Taxes are $3047/year

House 2
Estate sale, 2 bedroom 2 bath brick ranch on about 1/2 an acre. 1350 SF. 15x22 garage (giant one car?) With heat. Needs complete updateing but is in an area where the updated house would be easy to sell. Drive to work will stay the same essentially. I need to rip out the carpet and paint before we would move in and then The bathrooms need to be rehabed and the kitchen is usable but id want to do that within a year or so too. Price is $127,500 Taxes are $5640/year.

I can do most of the work myself on this house (minus installing the new carpet) so its all just going to be materials costs. So do you go for the house and do the work or go to the move in ready duplex and suck it up for a while til you can sell and buy the house. Both are in good school districts. My gut tells me to buy the house even though it needs work as it seems to be more of an investment.